United States: Hurricane Irma: 10 Challenges For Employers

Hurricane Irma shows no sign of relenting as it barrels toward
Florida and the Southeast Coast of the United States. As noted in a
prior Littler article about Irma, safety and security are the
top priorities at this point.

Once the storm passes, however, employers will face a host of
unusual challenges, on top of their basic operational needs and
personal concerns. We discussed a number of these employment issues
in-depth in our recent article concerning
Hurricane Harvey, which wreaked havoc in Texas and Louisiana.
Because employers in the Southeast will now contend with the same
dilemmas, we briefly highlight the key issues likely to affect
employers in Irma's path. Employers are encouraged to review
our prior articles for more detail.

1. Calculating the Wages of Non-Exempt Employees

Under the FLSA, as well as pertinent state laws, non-exempt
workers must be paid only for the time they work. As a result,
employers need not compensate non-exempt employees who are not
working because of a storm. Notably, it does not matter whether the
absence is based on the employer's decision to close a worksite
or the employee's decision to stay home or evacuate.

There may be exceptions during a weather event for waiting time,
or on-call time. For example, the FLSA, as well as North Carolina
law, considers employees to be "on call" if they must
remain on the employer's premises and are unable to use their
time for their own purposes.1

2. Calculating the Wages of Exempt Employees

When an employer shuts down its operations because of adverse
weather conditions for less than a full workweek, exempt employees
must be paid their full salary.2 This rule also applies
if exempt employees work only part of a day.

If an employer is open for business, on the other hand, an
exempt employee who misses work due to the weather situation is
considered absent for personal reasons. In lieu of paying salary,
an employer with a bona fide leave or vacation policy may
require the employee to use his or her accrued paid time off to
cover the absence. As long as it is permitted by state law, leave
time in this circumstance may be taken in full or partial days.

If an employer has a leave policy, but the absent employee does
not have a leave account balance, the employer is not obligated to
pay the employee. Unpaid leave, in full-day increments, may be an
option for employees who do not have a leave account balance.

3. Reliance on Remote Work

Employers trying to get up to speed after Irma may choose to
consider allowing employees to work remotely (i.e., at
home), whether as a long-term or short-term solution. As noted
earlier, non-exempt employees must be compensated for all time
spent working. Thus, employers must pay non-exempt employees for
performing any work remotely and, moreover, may need to rely on
employee self-reporting of hours worked in such a scenario. Exempt
employees, too, must be paid their regular salary in this
circumstance, unless leave time can be applied for partial
days.

4. Potential Delays in Wage Payments

One possible consequence of a natural disaster such as Irma is
the delayed processing of employees' wage payments. This
situation can cause employers to unintentionally run afoul of state
law. Georgia, for example, requires employers to establish pay
periods divided into at least two equal periods within the
month.3 In South Carolina, moreover, an employer must
provide 7 calendar days' advance notice to employees if there
is a change to the designated payday or a decrease in the employee
wage rate.4 Yet, as a practical matter, employers may be
unable to process or fund payments to satisfy these requirements,
especially in the immediate wake of the storm.

Although some laxity may be afforded to those who experience
significant difficulty meeting these types of obligations as a
result of the hurricane, the states currently in Irma's path
(Alabama, Florida, Georgia, North Carolina, and South Carolina)
have not indicated if there may be any relief from or waiver of the
normal wage payment laws. Furthermore, if payroll is processed in
these states for employees working in other states, it is
important to be mindful of those state laws and potential penalties
for delayed payment.5

5. Applicable Leaves of Absences

Employers should bear in mind that employees may be entitled to
use certain types of leave to deal with the ramifications of
Hurricane Irma.

For example, employees who have suffered a serious injury or
illness—or who have a family member who did—may be
entitled to leave under the federal Family and Medical Leave Act
(FMLA). State or local law may also apply to certain employees.
Dade County, Florida has its own family and medical leave
ordinance, for example.6 Even if not covered by federal,
state, or local laws providing for time off for illness or injury,
an employee may qualify for sick or other leave under a company
policy or collective bargaining agreement.

Certain employees may be eligible for leave as volunteer
emergency responders. In South Carolina, an employer may not
terminate an employee who serves as a volunteer firefighter or EMT
and who responds to a declared state of emergency in lieu of coming
to work.7 Alabama and North Carolina have similar laws
providing for such unpaid leave.8

Employees absent from work to assist with relief efforts may
separately qualify for protected time off. Under the Uniformed
Services Employment and Reemployment Rights Act of 1994 (USERRA),
employees may take a leave of absence for duty in the uniformed
services. For purposes of disaster relief, uniformed
services include specified service by members of the National
Disaster Medical System, appointment of a "System member"
of the National Urban Search and Rescue Response System9
into federal service,10 the National Guard if called by
the President of the United States, and any other category of
persons designated by the president during a time of national
emergency.11

Relatedly, to the extent that employers relax enforcement of
their leave policies in light of Hurricane Irma, they should remain
mindful of state and federal antidiscrimination laws. Employers
should try to ensure that all exceptions are based on legitimate,
non-discriminatory reasons and are consistently applied across the
workforce.

6. Duty to Provide Reasonable Accommodations

Additionally, employers in the affected region should be
prepared to address employee requests for accommodation. The
Americans with Disabilities Act (applicable to employers with 20+
employees) and related state and local antidiscrimination laws
require employers to provide reasonable accommodations to qualified
employees with disabilities. Because employees who are physically
or emotionally (e.g., post-traumatic stress disorder)
injured by Hurricane Irma's impact may be entitled to
reasonable accommodation, employers should take all such inquiries
seriously.

7. Unemployment Benefits

Employees who are displaced from their positions due to
Hurricane Irma may be eligible for unemployment compensation from
the applicable state workforce commission.12 State
unemployment benefits typically run for 26 weeks. The government
sometimes has the authority, however, to extend those time
limits.

Moreover, pursuant to the disaster declarations issued by
President Trump, unemployment benefits could be offered to certain
workers who lose their jobs due to Hurricane Irma, but do not
qualify for state benefits, such as self-employed individuals.
Employers may want to consider letting employees know about
eligibility for these programs if the employer cannot provide work
for employees as a result of the storm.

8. Federal WARN Notification

Employers that ultimately decide to close a facility, or
implement a mass layoff, due to Irma's effects must evaluate
whether notice will be required under the federal Worker Adjustment
and Retraining Notification Act (WARN).13

Briefly, the WARN Act requires a covered employer (100 or more
employees) to give 60 days' notice prior to a plant closing or
mass layoff.14 When required, WARN notice must be
provided to affected nonunion employees, the representatives of
affected unionized employees, the state's dislocated worker
unit, and the local government where the closing or layoff is to
occur.15

While WARN provides some leeway in the case of a natural
catastrophe, the exception is quite limited. Employers may give
shortened (or retroactive) notice if the disaster was a direct
cause of the job losses, and may be able to rely on the
"unforeseeable business circumstances" exception if the
disaster was an indirect cause. Nonetheless, employers are not
relieved completely of their WARN notice obligations. They must
give "as much notice as is practicable" (even if notice
is retroactive), and they must state why they were unable to give
notice earlier.16

9. State Plant Closure or Mass Layoff Notifications

Some states have enacted mini-WARN laws or otherwise require
notice to a state agency in the event of a mass layoff. Neither
Florida, nor North Carolina, has such a state statute. But other
Southeastern states have certain notice duties that might be
triggered following Irma.

Specifically, in Alabama, Georgia, and South Carolina, employers
are obligated to notify the state unemployment agency of a mass
separation. Alabama and Georgia require notice about separations
due to lack of work, implemented at about the same time and for the
same reason, involving 25 or more employees from a single
establishment.17 Notice in Alabama is due as soon as the
separation date is determined "and in no event later than the
date of the actual separation." Employers in Georgia must
provide notice, using specified forms, to the state Department of
Labor within 48 hours of the layoff.

Meanwhile, in South Carolina, notice of a mass layoff involving
10 or more workers must be filed with the pertinent office no later
than 10 calendar days (exclusive of Sundays and holidays) after the
separation.18 Employers are instructed to use a
designated form for notice. South Carolina employers also should
inform all affected employees that notice has been submitted, and a
claim therefore initiated, so as to avoid duplication of efforts
and redundant filings.19

10. Qualified Disaster Payments to Employees

Internal Revenue Code section 139 provides that an employer may
make a payment to an employee that constitutes "a qualified
disaster relief payment," without any income or payroll tax
consequences. "A qualified disaster relief payment" means
any amount paid to or for the benefit of an individual to reimburse
or pay reasonable and necessary personal, family, living, or
funeral expenses incurred as a result of a "qualified
disaster," or to reimburse or pay reasonable and necessary
expenses incurred for the repair or rehabilitation of a personal
residence or repair or replacement of its contents to the extent
that the need for such repair, rehabilitation, or replacement is
attributable to a qualified disaster. A "qualified
disaster" is generally one that is declared by the President
of the United States. Prior hurricanes have been presidentially
declared "qualified disasters" within certain affected
areas.

In short, with such a designation, employers may make payments
to their employees to help them with living or personal expenses or
repairing their homes without having to withhold or pay income and
payroll taxes.

In addition to the topics highlighted herein, employers may need
to consider issues related to employee assistance programs,
property and casualty claims, workers' compensation inquiries,
benefits continuation options, and tax reporting duties. Employers
also may need to handle employee requests for loans and hardship
distributions from employer-sponsored retirement plans, if the
funds are needed to rebuild or to assist a close relative or
dependent affected by Irma.

For now, we hope our clients and friends stay safe, and we are
ready to help employers tackle this complex situation as it
unfolds.

2. 29 C.F.R. § 541.602(a) (explaining that
deductions may not be made when work is unavailable at the
employer's instruction); see U.S. Dep't of Labor,
Wage and Hour Div., Opinion Letter FLSA2005-46 (Oct. 28, 2005)
(stating that exempt employees must be paid when "the employer
closes operations due to a weather-related emergency or other
disaster for less than a full workweek"); U.S. Dep't of
Labor, Wage and Hour Div., Opinion Letter FLSA2005-41 (Oct. 24,
2005).

3. Ga. Code Ann. § 34-7-2. In addition, the payments
made on each pay date must correspond to the full net amount of
wages or earnings due the employees for the period for which the
payment is made.

4. S.C. Code Ann. § 41-10-30(A).

5. For example, if the timely payment of wages to
employees in California is compromised, an employer may be subject
to monetary penalties under that state's labor
code.

6. Dade County, Fla., Ordinance §§ 11A-29
et seq.

7. S.C. Code Ann. § 6-11-1460.

8. Ala. Code § 36-21-160; N.C. Gen. Stat. §
166a-19.76.

9. The National Urban Search and Rescue Response System
was established under the authority of the Federal Emergency
Management Agency (FEMA) to organize federal, state and local
emergency response teams into integrated federal disaster response
task forces.

10. 38 U.S.C. § 4303(13).

11. As of this publication, President Trump has not yet
designated any such category of persons. Service in the National
Guard for a unit activated by a state governor, rather than the
president, and work for the FEMA generally would not be considered
part of the uniformed services under USERRA.

14. A plant closing occurs when a facility is
permanently or temporarily closed and 50 or more full-time
employees suffer a job loss. A mass layoff occurs when
either of the following suffer a job loss: (a) 500 or more
full-time employees at a facility; or (b) 50 or more full-time
employees at a facility constituting at least 33% of the workforce.
A job loss includes a layoff of six months or more. 29
U.S.C. § 2101(1)-(3).

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